Facebook dives 17% in early trading to new low; stocks otherwise up
Facebook’s short life so far as a public company continues to be inauspicious, as its stock plunged as much as 17% to a new low of $22.28 in early trading Friday.
Investors are taking out their disappointment on the company after it reported less than stellar earnings Thursday after trading closed. Though revenue at the Menlo Park, Calif. company came in above expectations at $1.18 billion, with adjusted earnings per share matching forecasts of 12 cents, its costs and expenses are up 295% from the same period a year ago.
Facebook also posted a loss of $157 million. Investors might also be punishing Facebook for not offering a performance forecast for the rest of the year.
The earnings report was the company’s first as a public company.
The social network’s stock, already hemorrhaging after hours on Thursday, continued sinking on Friday but did edge back up from the day’s low. Its initial public offering was priced at $38, but the company has been struggling since coming out of the gate on May 18; its previous low was $25.22, which it hit in early June.
Otherwise, the market was up Friday morning. Though new gross domestic product data showed the U.S. economy growing at a slower pace, the 1.5% annual rate reported was better than analysts had expected.
In late morning trading in New York, the Dow was up 108 points, or 0.8%, to 12,995.96. The Nasdaq gained about 32 points, or 1.1%, to 2,926. The S&P 500 was up 15 points, or 1.1%, to 1,375.
There were some stragglers. Starbucks tanked as much as 12% to $46.12 a share after missing expectations and lowering its outlook. Revenue soared 13% to $3.3 billion while same-store sales in both the U.S. and globally increased. Profit rose 19.3% to $333.1 million.
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